Fixer Jay’s Mom & Pop Millionaire Blog

The quickest road to success is to specialize- YES, become a specialist! Doctors, teachers and musicians all benefit from specializing in professions or activities that encompass a much larger field. Doctors may know a great deal about the human body generally, but an MD who specializes in bones will likely have greater knowledge in that area of practice – and so it is with fix-up investors in the real estate business.

Real estate investing covers bare land, construction and development and both residential and commercial activities. Restoration, remodeling and fix up can involve any improved real estate. Each has its own range of costs and measurements of value to determine the feasibility. Since costs and values can vary greatly by location, as well as the particular use, there’s no “one size fits all formula” that works for real estate investing generally! Selecting a specialty and learning it well is much faster than trying to learn everything about all the various ways to invest.

One can argue the pros and cons about which way is best, but for the majority of folks, residential real estate; like in houses and the homes we live in, is the easiest to understand, and in my opinion, the best place for beginning investors to get their feet wet. Naturally, where to start also involves the economics – as in how much money will it take to invest? Here again, everyday working folks find themselves extremely limited! As an example; when I started, $20,000 sounded like all the money in the world.

However, $20,000, $50,000 or even $100,000 won’t make much difference if you don’t know where to spend it. Money doesn’t guarantee safety and a larger amount will disappear just as quick when you don’t know what you’re doing. By specializing in one particular area, you stand a far greater chance of spending whatever amount you have, wisely!

FIXER PROPERTIES INVOLVE LESS COMPETITION

The less people who want what you’re after, the easier it will be to acquire what you want. Nothing secret about that, it’s one of the basic laws of nature! Competition drives up both cost – and desirability. Ugliness is my number one price reducer! Most people tend to back away from anything that’s ugly! Also, most people do not possess the vision, or have the training to spot value in the midst of pure ugliness. Learning to judge value where others can’t, can earn you a fortune in the house fix-Up business. Naturally, you must possess the skills to fix the problems once you find the right property.

Sellers who own ugly rundown properties (income units) often find very few buyers willing to make serious offers because most are looking for attractive, trouble-free properties! Even if they do make an offer – it’s generally a “low ball” offer, which often insults the seller. Insulted sellers don’t make counter offers, which of course, stops the deal cold. Naturally, rundown properties are worth less, but many times a workable purchase agreement can be reached by first determining what benefits the seller will accept. Here again, it’s the fix-up buyer’s skills, rather than the amount of money that makes the purchase successful.

Tags: Success Secrets by FixerJay
No Comments »

In 1961 author and millionaire investor~ Robert W. Kent, wrote his best-sellerbook: “HOW TO GET RICH IN REAL ETATE” Published by Prentice Hall, Englewood,NJ. In the very first chapter Mr. Kent offers his opinion about the chances for an average ordinary working person to become the next real estate millionaire. On Page 2 Kent says:
“It’s very feasible for any sincere man or woman who is steadfast in purpose and is free of the 3 cardinal faults; TIMIDY, NEGATlVENESS and LAZINESS. Self-doubt is the on1y thing that can stop you. You must learn to push doubt aside every time it rears its ugly head.”
Mr. Kent began his investment career while working in a 24 hour key shop in Brookline~ MA. Starting in 1931, he began acquiring older rundown flats and apartments as quickly as his limited funds would permit. The key he said; “Each property I purchase must provide me with MIF, money in the fist.” That simple strategy would make him a millionaire by the end of the ’40’s.

SO YEARS LATER – NO CHANGE

Today, more than half a century later~ Kent’s wisdom is still a recipe for making millionaires. Other than a few personal preferences, I can find nothing to improve on! Of course~ MIF is more often called cash flow~but the idea is to get it! What you call it don’t matter very much! In my opinion, cash flow investing is even more feasible today because there are more qualified teachers who offer excellent “hands-on” training.

DIFFERENCE BETWEEN SUCCESS & FAILURE VERY SMALL

After 45 years investing and 25 years of teaching others. I can honestly tell you – there’s not a great deal of difference between students who enjoy super success — And those who just flounder around year after year without much measurable progress. Even with all my years doin’ this stuff. I won’t pretend I’m smart enough to figure what causes one student to be successful and the next to fizzle out when the opportunity for both is equal! Allow me to share5 personal observations that perhaps might explain a few answers.

1.     Many folks somehow imagine they are ready to compete and do    business after a free seminar or reading a book. They are not being realistic with themselves.

2.      Some people think there’s a magic formula to real estate investing, particularly with specialties like options. Note buying foreclosures. Probate sales and anything else that seems cleaner, easier and don’t sound like it requires too much time or effort! Friends – this is nothing more than a pipe dream that most often turns into a nightmare! You must understand real estate basics if you wish to be successful.

3.      I cannot remember ever having a student “too dumb” to become a successful real estate investor. On the flip side, I’ve been around hundreds of folks “too smart” to make it! Somehow they seem to think that learning the basics and developing a sound strategy based on reality is simply a lesson designed for slow learners. These folks are most often doomed before they ever start!

4.      The first rule of education — Thoroughly investigate the teacher and his credentials! If any instructor is telling you that real estate is “easy as pie” jump up immediately and run fast ’cause it just ain’t so! You should always check out the teacher behind the scenes. Make some telephone calls or better yet, write to newspapers who publish syndicated real estate columnists. Ask for their opinion about so and so.

5.      While it’s true, you can learn real estate investing on your own, by yourself, without any help — It’s called the “cut ‘n try method”! And chances are, you can probably save a few hard-earned bucks on lessons. But the problem is, you can easily spend it all back – plus a whole lot more fixing up your mistakes. You can greatly hamper any success you might enjoy by having to continually repair early mistakes. I’m a past graduate of “cut ‘n try” and it kept me broke much longer than I deserved to be. There were not many classes or instructors teaching this stuff 45 years ago! Back then most TV’s were still black and white and the picture wouldn’t hold still. Believe me, learning the real estate investment business from someone who already knows how is far more profitable in the long run!

Tags: The Joy of Cash Flow Investing by FixerJay
No Comments »

In 1970 my license was mailed to the broker at Forestland Realty, located in the small town of Jackson, in the heart of California’s gold country. It was my first job as a real estate salesman. By the year’s end I had earned $7200 in commissions! Not too bad for a start I figured, but still far short of my million dollar dreams

Mr. Roper, my real estate instructor, taught me enough to pass the examination on the very first go-around. At the time I remember thinking he was the smartest instructor in the world – but as things turned out, passing the real estate examination is not the reason I’m still thankful to Mr. Roper today. Instead, it was a casual remark he made to the, entire class of 76 students! Here’s what Mr. Roper said.

Commissions will not make any of you rich! Rich folks, he said, are the ones who get their names typed on deeds. They are the property owners. He then told us a simple formula for becoming wealthy! He said we should invest 10% of all our commissions in income properties. That way, he said, we’ll be earning money even as we sleep.

At the time I didn’t pay much attention to Mr. Roper’s advice! To me, it seemed like commissions would make me a whole lot richer than rents – and much quicker too! It took me several more years before I would finally test Mr. Roper’s advice. I purchased four FIXERUPPER HOUSES and began my journey living off the rents I collected.

Lots of water has passed under the bridge since I acquired those first four houses. Along the way I quickly discovered that fixed-up properties provided lots more cash flow. They also were 3 or 4 times more profitable! I also found out that you don’t need to be a Harvard graduate to make lots of money fixing ugly houses. Once you learn how to do it, you can keep repeating til you reach whatever income level you choose.

Before I sold a few houses several years’ back, my rents had soared to nearly $100,000 a month. Naturally I have expenses like everyone else - but I must tell you, I’m still a long ways ahead of any commissions I ever dreamed about earning.

One of the most frequent questions I’m asked at my seminars — Isn’t there a lot of work involved fixing up rundown houses” Of course there’s work, but when you’re done – the profits make it all worthwhile.

When you read my best-selling book, “INVESTING IN FIXER-UPPERS”, you’ll quickly discover why I’m the highest paid plumber in my town. Money makes plumbing seem much easier. The truth is, you don’t need to be a plumber, painter or electrician! About 90% of fix-up work is nothing more than hauling trash and cleaning. That’s why the ladies are often better than the guys. They understand the value of neatness and cleaning.

Folks often ask me — Is it hard to earn $100,000 every month from rents? When you first start out, it seems impossible, but as you begin to learn, it starts getting easier. First you’ll earn $1000 a month – and before too long you’ll reach $5000. The best part about investing the way I teach – you can quit after 10 houses or keep going til you own 200 like I did. It’s up to you! If you read my book, and you only acquire 3 or 4 solid income-producing properties, you’ll be lots better off than most of your friends.

Tags: The Big Picture by FixerJay
No Comments »

Back in the mid 1990’s for almost 8 years in a row there was hardly a smidgen of appreciation in my hometown. Both housing prices and the cost to rent stayed about the same. Then suddenly, the wheels came off! Home prices doubled, rents shot up by 50% and vacancies dried up to almost none!

It don’t take a rocket scientist to figure out when you own a bunch of houses like I do – every morning it’s like gettin’ up to a brand new Christmas every day. Everything to do with real estate values had simply gone nuts! In most types of business, one might ask — What have you done differently? I almost feel guilty when I tell you the answer is nothing. I might look like a genius, but I’ve done absolutely nothing different for 35 years or so!

Back in October 1987, Fortune Magazine wrote an article (page 157), “REAL ESTATE HAS PRODUCED THE BIGGEST FORTUNES IN HISTORY.” The article revealed he names of the several super-rich guys with more zeros in their net worth than I can even count. As I read their stories, it occurred to me that although I’m not in their league financially, real estate investing has rewarded me with far more wealth than most other folks in my hometown.

ORDINARY INVESTORS CAR BUILD EXTRAORDINARY WEALTH

At my seminars I teach small-time, “Mom and Pop” investors how to become financially independent investing the same way I do! I show students how ordinary, everyday investors, both part-time and full-time, can build extraordinary wealth, one property at a time. Sophisticated investors like the kind in Fortune Magazine are by no means the only folks who can share in the American dream. Real estate wealth is wide open to everyone willing to roll up their sleeves, learn some new skills and jump right in the pie! That’s what I did and that’s what I can teach you!

Another thing I learned from reading Fortune Magazine was there are only two kinds of rich real estate investors! Those who start out like I did doing one small deal at a time – and those who inherit real estate wealth from others. If you don’t happen to be in the second group like most of us, then you’ll have to do it my way. The good news is – you can if you’ll give yourself permission to do it! I’m ready to teach you if you’re ready to learn. Do yourself a big favor Make up your mind right now to join me at my next seminar. You’ll be glad I helped you decide.

Tags: Vision of Opportunity by FixerJay
No Comments »

I don’t know about you folks but I’ve stayed mad at my obnoxious tenant for as long as 10 days in a row! I still remember not being able to get some emotional battles outta my head! It’s been quite a few years now – but I still remember how upset I used to get from arguing with a tenant. Naturally, my tenant didn’t occupy my thoughts every single minute of every single day, but it boils down to this — My tenant stole my valuable time! You simply cannot be a productive investor and get things accomplished when you are constantly upset with your tenants.

This is how my MEMOS got their start! I was extremely desperate to find a way to free my mind of tenant problems. We human types can only process one thought in our brain at one time. It’s nearly impossible to have constructive, moneymaking thoughts if you allow your tenants to constantly keep you upset! Believe me when I tell you, the time and money you can lose over emotional tenant confrontations staggers the imagination.

THE LANDLORD’S MIND – IT’S A TERRIBLE THING TO WASTE

Doing business with tenants is what us landlords do. Needless to say, it’s where our money comes from! However, nothin’ says we have to personally go see them for every little issue that pops up! For example; too many guests showing up at their duplex, cars parked on the lawn, habitual late rent payments. Most of these matters involving their tenancy can easily be handled much more efficiently and emotionless with short hand-written memos.

Managing Tenants By Mail

In order to say the right thing – it helps to pretend you are the tenant receiving the memo! How would this memo set with me, you should ask yourself! When I can say to myself, this is a reasonable request and it sounds quite fair, I feel I’m ready to send it to my tenant. I rarely need to waste any time thinking about what I want; I already know what I want! My challenge is to write a memo that my tenant will likely respond favorable to! You must always remember, threatening memos seldom change anything. Your goal is to present a written argument to your tenant making him understand that – he’s much better off to comply with your proposal than if he doesn’t. You must clearly spell out or paint a visual picture of what will likely happen if the tenant ignores your memo. Obviously, tenants are very sensitive to any words that sound like a rent increase might be in their future. We call this “The Hook”.

Allow me to share one of my favorite memos I use for my late paying tenants – I’m trying to convince them to pony up their late fees. This memo enjoys about an 85% success rate.

DEAR TERRY TARDY:

WE NEED YOU HELP!   During the past six months or so, our records show your rents are coming in later and later! This month (Sept.), we didn’t receive your payment (check 9171) until the 13th. Apparently you forgot to add the late fee to your payment! As you know, we allow 5 extra days as a grace period after your official rent due date. Our rental contract shows your rent date is the 1st of each month, but it’s always mailed much later.

Starting immediately, please include the $40 late fee with your rent payment when it’s mailed after the 5th of the month. We use the postmark on the envelope to determine late rents. I hope this sounds fair to you! We’ve found that most of our tenants prefer paying a one time late fee rather than having their regular monthly rent increased! Thanks so much for your help
- Bob, Manager

In this memo, my hook is in the last sentence, which I’m sure you can pick out! Tenants can spot it in a split second – and I will tell you, this is an extremely effective memo for beefing up late fee collections. I might also point out – no tenant has ever called me with questions about this particular memo – it seems, they all understand it perfectly well!
Students who have learned to use my memos wouldn’t trade them for anything. Most claim, once they learn how to design - or create a convincing hook – they work like magic!

Tags: Landlording Success by FixerJay
No Comments »